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Johannesburg - The rand was steady against the dollar early on Monday but looked pressured by a weaker euro in the absence of any impetus from Asia, where many markets are closed for the Lunar New Year holiday.

By 08:49, the rand was flat at R8.88/$.

The local unit weakened for three sessions at the end of last week. It had been strengthening in a technical correction since the start of the month, but found strong resistance at R8.80.

Charts show if the rand manages to break the R8.80 level, it could strengthen all the way to below R8.70 levels hit in early January.

However, such moves may have to wait for liquidity to pick up when Asian investors return from holiday.

A weaker tone on the euro may put the rand under some pressure this session.

The eurozone consumes a quarter of South African exports, making the local unit vulnerable to moves by the single currency.

"Although the rand has enjoyed some short covering against a number of the crosses, the fact that the euro has stopped strengthening may hinder some of the rand's recovery prospects," Absa Capital strategist Michael Keenan said.

Yields on government bonds were slightly higher at 5.31% on the 2015 note and 7.30% on the 2026 issue.

Retail sales and mining production numbers are due on Wednesday and Thursday respectively, which should give an overall view of how the consumption and production sectors of the economy fared at the end of last year.

President Jacob Zuma will deliver his yearly State of the Nation address, outlining government's plan for the year, on Thursday.

The speech often contains signals of what may be contained in Finance Minister Pravin Gordhan's February 27 budget.

Investors are looking at the budget to see if government increases borrowing plans as dealers expect.

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